Nigeria’s Federal High Court in Lagos has ruled that Export Development Canada (EDC), a Canadian financier, can repossess an aircraft leased to Arik Air, marking the first application of the Cape Town Convention in the country.
The ruling, issued on November 27, 2024, by Justice Alexander Oluseyi Owoeye, follows the issuance of Nigeria’s Federal High Court (Cape Town Convention and Aircraft Protocol) Practice Direction on September 12, 2024.
This new practice direction establishes legally binding rules that reinforce Nigeria’s commitment to the Cape Town Convention, instructing courts to apply its provisions in relevant cases without interference from other legal provisions.
The court granted EDC the right to reclaim and dismantle the CRJ1000 aircraft, which had been grounded by Arik Air.
The disclosure, first reported by ch-aviation on Thursday, was shared the same day by Minister of Aviation and Aerospace Development, Festus Keyamo, on his official X page, endorsing the news and affirming its authenticity.
“First victory in court in Nigeria courtesy of the Cape Town Convention. The courts applied the CTC to the fullest and allowed instant repossession of an aircraft,” Keyamo’s tweet read.
This ruling marks a pivotal moment for Nigeria’s aviation sector, highlighting the country’s growing commitment to international leasing standards, particularly those of the Cape Town Convention.
Details of the case
The applicants in the case were Captain Samuel Caulcrick, the local repossession agent appointed by part-out firm Merchant Express Cargo, and Captain Isiaka Oyeshina Akinfenwa, CEO of the firm. Merchant Express Cargo had the CRJ teardown contract.
In previous hearings, both men had criticized the tactics of the Economic and Financial Crimes Commission (EFCC) and Arik shareholder and founder, Johnson Arumemi-Ikhide.
Among other findings, Justice Owoeye’s ruling revealed that EFCC officials had harassed, threatened, questioned, intimidated, detained, and threatened to detain the applicants during their attempts to repossess the aircraft.
- The court granted EDC the right to repossess and dismantle the aircraft and issued an order preventing EFCC officials from interfering with the process.
- The CRJ1000 remains in storage at Lagos airport.
- The aircraft, a 2013-built regional jet, was leased to Arik Air in 2014 by JEM Leasing Limited, with EDC helping finance the aircraft’s acquisition and holding a mortgage over it.
- In December 2022, JEM Leasing moved to deregister and repossess the aircraft after Arik Air defaulted. At the same time, JEM entered into an agreement with Alberta Aviation Capital Corporation to sell the CRJ1000, with EDC retaining the mortgage.
- Arik Air had stopped operating the aircraft in 2019.
- Arik Air, which had grounded the CRJ1000 in 2019, had been struggling financially, leading to its receivership under Nigeria’s Asset Management Corporation (AMCON) in 2017.
The aircraft had been deregistered in 2022, but efforts to repossess it were blocked by the EFCC, citing concerns about the legality of the sale.
The Federal High Court’s ruling clears the way for EDC to proceed with the repossession, marking a significant step forward in the enforcement of international aviation laws in Nigeria.
